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Chapters 1-4The Accounting Cycle
Chapters 5-8Current Assets
Chapters 9-11Long-Term Assets
Chapters 12-14Liabilities/Equities
Chapters 15-16Using Information
- Chapter 15: Financial Reporting and Concepts
- Chapter 16: Financial Analysis and the Statement of Cash Flows
Chapters 17-20Managerial/Cost
Chapters 21-24Budgeting/Decisions

Chapters 1-4The Accounting Cycle
Chapters 5-8Current Assets
Chapters 9-11Long-Term Assets
Chapters 12-14Liabilities/Equities
Chapters 15-16Using Information
- Chapter 15: Financial Reporting and Concepts
- Chapter 16: Financial Analysis and the Statement of Cash Flows
Chapters 17-20Managerial/Cost
Chapters 21-24Budgeting/Decisions

Chapter 2 – Multiple Choice

By admin / June 18, 2015

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Question 1 of 8

1. Question
Of the following account types, which would be increased by a debit?
- Liabilities and expenses.
- Assets and equity.
- Assets and expenses.
- Equity and revenues.
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Question 2 of 8

2. Question
The following comments all relate to the recording process. Which of these statements is correct?
- The general ledger is a chronological record of transactions.
- The general ledger is posted from transactions recorded in the general journal.
- The trial balance provides the primary source document for recording transactions into the general journal.
- Transposition is the transfer of information from the general journal to the general ledger.
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Question 3 of 8

3. Question
The following comments each relate to the recording of journal entries. Which statement is true?
- For any given journal entry, debits must exceed credits.
- It is customary to record credits on the left and debits on the right.
- The chart of accounts reveals the amount to debit and credit to the affected accounts.
- Journalization is the process of converting transactions and events into debit/credit format.
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Question 4 of 8

4. Question
Failure to record the receipt of a utility bill for services already received will result in:
- An overstatement of assets.
- An overstatement of liabilities.
- An overstatement of equity.
- An understatement of assets.
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Question 5 of 8

5. Question
The proper journal entry to record Ransom Company’s billing of clients for $500 of services rendered is:
- Cash 500
  
  Accounts Receivable 500
- Accounts Receivable 500
  
  Capital Stock 500
- Accounts Receivable 500
  
  Service Revenue 500
- Cash 500
  
  Service Revenue 500
Correct

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Question 6 of 8

6. Question
The proper journal entry to record $1,000 of Dividends paid by Myer’s Corporation is:
- Dividends 1,000
  
  Cash 1,000
- Accounts Payable 1,000
  
  Cash 1,000
- Dividends Expense 1,000
  
  Cash 1,000
- Dividends Expense 1,000
  
  Service Revenue 1,000
Correct

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Question 7 of 8

7. Question
Lynn Lipincott invested land valued at $5,000 in her business. This transaction would be recorded by:
- Cash 5,000
  
  Capital Stock 5,000
- Land 5,000
  
  Capital Stock 5,000
- Land 5,000
  
  Service Revenue 5,000
- Capital Stock 5,000
  
  Land 5,000
Correct

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Question 8 of 8

8. Question
The trial balance:
- Is a formal financial statement.
- Is used to prove that there are no errors in the journal or ledger.
- Provides a listing of every account in the chart of accounts.
- Provides a listing of the balance of each account in active use.
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